Risk sharing in supply chain partnerships: An SME perspective
A study of the behaviour of risk sharing in partnerships in a construction supply chain
Mirna Galvan Granat (TU Delft - Civil Engineering & Geosciences)
Sicco Santema – Graduation committee member
Jafar Rezaei – Mentor
Jelle Koolwijk – Mentor
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Abstract
A research gap was found when addressing the literature on small-to-medium-sized enterprises (SMEs) in the construction industry. Subcontractors and suppliers are primarily SMEs and form the largest percentage of firms in comparison to large enterprises (LEs) in the industry. Many parties are mainly concerned with maximising their profit, reason why, in many occasions, subcontractors and suppliers are selected by the main contractor on the basis of lowest price, rather than best value. Main contractors include harsh terms in contracts with subcontractors and suppliers, e.g., risk transfer. Risk transfer is a well-known risk treatment strategy in project risk management that has the purpose of allocating a risk to the party most capable of handling it. Unequitable
distribution of risk is a consequence of current practices affecting commercially and financially weaker parties, such as SMEs.